Neeta (Finance) (345 Points)
27 March 2010Hello Members
plz enlightn me on dis - a pvt co with two directors ( both NRI ) wants to purchase land in India in the name of co . Now is there any limitation on land purchase . Also can FDI be taken on land purchase business
plz give a breif .
thanks and regards
neeta.
CourseCart.in
(Mentor at SHAYVIDZ Academy)
(3756 Points)
Replied 27 March 2010
| Originally posted by : Neeta | ||
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Hello Members plz enlightn me on dis - a pvt co with two directors ( both NRI ) wants to purchase land in India in the name of co . Now is there any limitation on land purchase . Also can FDI be taken on land purchase business plz give a breif . thanks and regards neeta. |
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Dear Neeta,
1. Pvt Co. is an INDIAN COMPANY having its seperate legal identity.. So Company is free to purchase Land from company's own fund, subject to provision in its AOA.
2. for NRI Directors/PROI, this transaction will be capital account transaction :- FEM (Permissible Capital Account Transactions ) Regulations, 2000
(a) Regulation 3 read with Scedule II - Acquisition and transfer of Immovable Property in India by PROI is permissible (but only in their own name as an Individual & not in the name of company).
(b) Regulation 4 - No PROI shall make INVESTMENT IN INDIA in any entity which is engaged, or proposes to engage in REAL ESTATE BUSINESS, OR CONSTRUCTION OF FARM HOUSES but Real estate business shall not include - development of township, construction of residential or commercial premises, construction of raods or bridges.
SO PROI CANNOT MAKE INVESTMENT IN THAT COMPANY WHOSE BUSINESS IS OF PURCHASE & SALE OF LAND ONLY & NO DEVELOPMENT OF TOWNSHIP ETC.
If u have any doubt then do ask me...
Rasesh
(CS CWA MBA (Fin) B.Com LL.B (Spl))
(6501 Points)
Replied 30 March 2010
FDI in real estate is allowed subject to the conditions laid down by the department of industrial policy and promotion. Kindly refer to the FDI policy on https://dipp.nic.in/
Gautam
(A)
(21 Points)
Replied 31 March 2010
Hi Neeta,
Additionally, you also will have to comply with the requirements under the BTAL Act, 1948, MLRC 1966 with regards to restrictions on purchase of land by a Company, in case the land is and agricultural land
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
CAclubindia
